On 7/8/09 F completed wave e of a textbook 4th wave triangle at 5.24 3 ticks above the wave c low of 5.21. The standard measure rule for running triangles allows for the upper trendline to extend above the wave 3 high as shown. The measured target was then 7.31. F hit that target on 7/29, but the 5th wave did not look complete so I decided to give it another couple of days. The range expansion today probably marks the end of the run and provided a good place to take profits for a gain of 26% in 10 days. Frankly, I was surprised at today's move in F and counted it as an unexpected gift, not to be refused. Other approaches project F to as high as 9.30, but I am not willing to take that chance on a 5th wave at the current juncture in the market.
The wild swings continue in the Dollar, gold, and oil. I will stick to my current position respective to these moves as there is ample evidence that the Dollar is approaching an important low despite today's action. Looking only at price in gold, the directional odds are 50/50 as far as I can tell at this point, and when that is the case there is no benefit in switching sides until the odds change. Overall, the pattern for the bearish case would not be negated even if gold advances to the 975 area which is now a possibility. The seasonal pattern for gold is calling for a sharp spike into Monday followed by a decline for the rest of August. Also, the JJC is now close to resistance at the trendline drawn above the April/June highs. On balance, it seems more likely that the Dollar will turn up as the market turns down and that gold and oil will follow suit.
The Qs have closed at the low for two days in a row. I think the odds definitely favor the expected correction. All in all, I plan to just manage positions for the next couple of weeks.
Have a good weekend.